In Foundations of the Pricing of Financial Derivatives: Theory and Analysis, two distinguished finance professionals deliver a new gold standard in the study of financial derivatives for doctoral and master's students in finance. Drawing on the authors' extensive combined experience teaching on the subject, and in more mainstream finance subjects, the book strikes an effective balance between fine-grained quantitative detail and a high-level theoretical overview. The authors provide the necessary mathematical foundations to understand and excel in this highly technical subfield, in addition to grounding students in a careful new way of thinking where the Black-Scholes-Merton model is more than just a rote formula and the concept of arbitrage is explained in detailed fashion. Foundations of the Pricing of Financial Derivatives contains many standard tables, figures, line drawings, practice problems, and references. It also includes a solutions manual for instructors. Rather than assuming the reader already possesses deep mathematical understanding of the concepts explained within, the book offers the required math foundation alongside its lessons, bringing master's and doctoral students along even if they have no background in a highly technical field. It fills the gap between master's-level financial derivatives textbooks and texts that target mathematically trained graduate students. The book also includes practical insights based on the authors' extensive consulting experience. An essential and practical resource for students in advanced financial courses, Foundations of the Pricing of Financial Derivatives is a class-tested guide to a complex subject of critical importance to finance professionals working in the real world.